Direct Line Insurance Group PLC (LSE:DLG) got a boost recently from a positive update from insurance industry peer Sabre.
It was a warning from Sabre that first flagged the impact of inflation on insurance car repairs and its returning optimism now might confirm things are moving in the right direction again across the sector.
Sabre said in a statement: “Premiums in recent months have been above expectations, therefore we increase our overall 2023 full-year gross written premium year-on-year growth expectation to 20% - 25%."
These significant rate increases were mitigating the impact of claims inflation and ensuring margins return towards historical levels for business written in recent months.
If that trend is being seen elsewhere, it should be good news for Direct Line investors who have seen the share price battered over the past year.
A rally after it sold its brokered commercial division for £520 million has faded a little though UBS applauded the deal even if earnings take a hit next year as it effectively ruled out the need for an equity raise.
Direct Line’s update on its financial position will be one of the key points to watch for in the statement.